Master Scheduling
Part 4 of 5

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Getting Top Management Involved

All these attributes of an effective Master Production Schedule are important. The Master Production Schedule cannot be complete if some demands are missing, if fore­casts do not get consumed properly, and customer orders are not processed properly. Choosing appropriate time periods and time fences are essential for Master Produc­tion Schedule stability. The feasibility of these Master Production Schedules should be plainly visible. Yet the key to the power of the Master Production Schedule is its strategic element coupled with Top Management's participation in the process. Most would agree that if Top Management is interested in an issue or process that it will get much attention. The speculation is that the reason Master Scheduling is not used effectively in most compa­nies is because Top Management does not understand its strategic significance.

When Top Management formulates a strategic plan, there are many variables that should be considered. Particularly important is the vision and mission of the business. This lays the foundation and direction for an appropriate strat­egy. Additionally Top Management needs to assess the current position of the company by evaluating and measur­ing past performance and conditions in the marketplace. The next step is equally critical. Top Management's foresight when gauging the future often spells the success or failure of the business. Consider IBM Corporation and their business strategy in relation to the personal com­puter. Their gauge of the future proved wrong and they are trying to recover from it even today.

From these ideas and considerations Top Management should formulate a strategy for competitive advantage based on price, quality, delivery and service. Their choice influences the way operations will execute the strategy and how the Master Schedule should be configured. The execution of the strategy should result in the establish­ment of tactical objectives for each functional area shown on the Operations Management chart. This is a key for the Master Planning processes of Business Planning, Demand Planning and Production Planning. The objective in the Business plan might reflect a desired Return-On-Assets as critical to the strategic goal. The Demand Plan may focus on gaining market share or providing more competitive pricing. The Production Plan may feature the expansion of manufacturing facilities to meet demands for new products or anticipated increases in sales. The possibilities are many but the process is the same—the strategic plan should drive the Master Planning processes.

Recall the situation of the company that had no Master Scheduling process and launched sales orders as the way to trigger production. This plant was "truly" customer order driven! This is different from being customer driven. The reality of the situation was that they created an erratic load and flow in the plant—not the best situation for a pull system to operate effectively. They generated a good bal­ance between excess inventory and shortages—the depen­dent demands reflected the occasional large order that forced early production or overtime work. They shipped 85% of the demands when the customer asked—but what happened to the other 15%? Products on the missed customer due dates were shipped late—the customers were informed only after the need date was past, even if the company knew this early. No one inquired to find out if the date the customer asked for shipment was in fact the date the customer needed or wanted the shipment. Big orders could consume available capacity causing other smaller orders to wait. The de facto result was that customers with large order got shipped first and other customers with small orders had to wait. Additionally, all of this confusion
was hidden because the "scheduling" that did take place was not visible to Top Management or anyone else in the company.

To be Continued